Good day, ladies and gentlemen, and welcome to the Sands Second Quarter 2024 Earnings Call. It is now my pleasure to turn the floor over to Mr. Daniel Briggs, Senior Vice President of Investor Relations at Sands. Sir, the floor is yours.

Thank you, Matthew. Joining the call today are Rob Goldstein, Patrick Dumont, Dr. Wolford Wong, and Grant Chum. Today's conference call will contain forward-looking statements. We'll be making these statements under the safe harbor provision of federal securities laws. The company's actual results may materially differ from the results reflected in those forward-looking statements. In addition, we will discuss non-GAAP measures. Reconciliations to the most comparable GAAP measure are included in our press release. We've also posted an earnings presentation on our website. We will refer to that presentation during the call. Timing for the Q&A, we ask those of interest to please pose one question and one follow-up, so we might allow everyone the opportunity to participate. The presentation is being recorded. I'll now turn the call over to Rob.

Thank you for joining us today. The Macau market continues to grow, with total gaming revenues increasing by 24% in the second quarter of 2024 compared to the same period in 2023. Additionally, mass play revenue rose by 29% year-over-year. We are optimistic about future growth in the Macau market and believe that gross gaming revenue will surpass $30 billion next year, continuing to increase annually. Our business strategy focuses on investing in high-quality assets and achieving scale. Macau has always had a highly competitive environment, and our strategic approach has allowed us to compete effectively. We have structured our capital investment programs to maintain our market leadership in the coming years. This strategy positions us for rapid long-term growth, enabling substantial share EBITDA while delivering top-tier returns on invested capital. Regarding our results in Macau, we achieved solid EBITDA for the quarter despite significant disruptions. SCL remains the market leader in both gaming and non-gaming revenue, holding a strong share of EBITDA. We are poised to capture high-value, high-margin tourism in the long term. Once the second phase and our Cotai Arena are completed, we expect our competitive advantage to be even more pronounced. We also had another strong quarter in Singapore, despite ongoing construction disruptions. The financial outcomes reflect the positive effects of our capital investment program and the growth in high-value tourism. Our status as an FPL Singapore destination is strengthened by a robust schedule of entertainment and lifestyle events. As we complete our investment programs, we anticipate significant future growth. Thank you for joining our call. I'll now hand it over to Patrick Dumont for the Q&A session.

Thanks, Rob. Macao EBITDA was $561 million. We expect that if we had held as estimated in our rolling program, our EBITDA would have been higher by $4 million. When adjusted for lower-than-expected hold in the rolling segment, our EBITDA margin for the Macau portfolio of properties would have been 32.1%, down 80 basis points compared to the second quarter of 2023. Context here is important. Our margins in London were directly impacted by the disruption from the London grand renovation. We closed the casino with 1,500 keys out during the quarter. The margin at The Venetian was 38.2%, and we expect margin improvement as The Venetian Cotai Arena comes back online later this year and as visitation to the market and growth in unrated play also increase. Margin at The Plaza and Four Seasons was 40%. We are now deep into our land grand renovation program. We plan to complete the first tower by year-end 2024 and the second tower by May of 2025. The Londoner Grand Casino has been closed since May and is scheduled to reopen in December. As these properties come online, between the end of 2024 and the first half of 2025, our competitive position will be stronger than ever. We expect meaningful EBITDA growth and margin expansion in the future.

Your first question is coming from Joe Greff from JPMorgan.

I'd like to start off on Singapore, if we could. Can you give us a sense of how players and visitors geographically are performing? More specifically, are you seeing any slowdown from Mainland Chinese visitation or spending at MBS? Was there any material trend change towards the end of 2Q versus what you've seen in the last couple of quarters?

Joe, as you know, from past calls, we have a diverse customer base in Singapore. We draw from many regions including China, Vietnam, Japan, Korea, Indonesia, and Malaysia. So we haven't seen much change from the past year. There is some seasonality at play in Q2. Our business, looking forward, was affected mainly by self-inflicted issues like construction. That is near the end at this point. Despite seasonality and construction difficulties, we continue to work towards our goal of achieving $500-plus million quarters. So, we feel solid about our prospects in Singapore. The premium mass segment continues to grow, and we think our goal of $2.5 billion out of Singapore can happen in the coming years.

And then, could you give us an update on any development opportunities in Thailand or what's happening in New York?

Great news is we are very ready to develop in new jurisdictions. We spend time looking at opportunities for our company to expand, and we're excited about it. Thailand is a very interesting market with strong opportunities for tourism. Depending on the setup and structure, it could be very interesting for us. If Thailand becomes available, we'd be very interested, but it's early days yet.

Your next question is coming from Stephen Grambling from Morgan Stanley.

Can you talk about getting back to 2019 levels in the current environment? Is there a need for changes in market growth or the competitive environment to get back?

The Macau market has always been very competitive. We've been effective in the way we compete because we follow an investment-driven model. Our success has driven value through investment and quality amenities. The Venetian Macau did $262 million of EBITDA at a 38.2% margin, despite capacity limitations due to the renovation. We expect these improvements to lead to better results as properties come online, so we are optimistic about the future.

The only structural change needed is unclear. The market is expected to exceed $30 billion next year, with our key assets well-positioned for success, resulting in significant EBITDA growth.

On capital allocation, you've been consistent with returns. What's the tolerance for being more aggressive with capital allocation considering the stock is near pandemic lows?

We see meaningful value in both equities with our stock trading lower than historical levels. We'll continue to repurchase stock, as we strongly believe in our business value. We're shareholder-friendly and looking to leverage the cash flow from completed projects to return more to shareholders in the future.

And if we invest in new opportunities, they are in the future, especially in New York, Texas, and Thailand. But we have room to complete other projects first.

Your next question is coming from Robin Farley from UBS.

Can you discuss your concerns about tariffs impacting the Chinese economy next year?

The U.S. political situation complicates things. China has had struggles this year, and we hope for improvement. Our greatest impact is from the missing 2 million-plus visitors. We cannot comment further on the political situation.

Can you share thoughts on your appetite for continuing repurchases?

As we use up the current authorization, we will discuss with the board about the future allocation of capital. Our board supports creating shareholder value through returns.

Your next question is coming from Carlo Santarelli from Deutsche Bank.

Can you discuss the missing rooms in the Londoner and their impact on overall casino performance?

The closure has impacted our performance as we're down a significant volume. However, we've managed to sustain overall volumes. We're missing some base mass, and our cash revenues are impacted due to fewer rooms.

Despite disruptions, we reached record highs in non-rolling drop and slot handle, but lost some base mass volume due to the closures.

Regarding the VIP side in Singapore, do you think your hold percentage reflects a structural shift?

It's a great question, and we'll consider adjusting our hold percentage in future statements. There's evident growth in what's happening at our tables, but we'll take time to analyze it further.

The question around hold percentage is important as we analyze the game mix. We will consider adjustments when warranted. The patron uptake on the floor is high.

Your next question is coming from Shaun Kelley from Bank of America.

Can you provide more insight into underlying visitation trends?

There's been a reduction in the recovery rate for non-Guangdong. We are unclear why. The premium segments are doing well, while base mass hasn't recovered as expected.

Visitation trends in terms of group visitation are seen. We expect potential increases from recent policy changes to boost future growth.

Your next question is coming from Brandt Montour from Barclays.

Can you explain how macro factors are affecting group visitation and pricing?

The slowdown appears more pronounced due to structural and macro factors for the group market, not limited to Macau. There are signs of positive policy changes that will boost visitation.

Government policies are helping increase the catchment area for visitors, which should positively impact future visitation rates.

Thank you, ladies and gentlemen. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. We thank you for your participation.